Your Ultimate Guide for Business Setup in Dubai
Dubai has emerged as one of the most lucrative global business hubs, gaining popularity for its strategic location, business-friendly policies, availability of world-class infrastructures, and tax benefits. Since the inception and establishment of revised UAE Commercial Companies Laws, in 2015, any form of business setup in Dubai is bound to thrive. The uniformity of the law is applicable in any type of company formation, located in the mainland or free zone, and ensures a seamless company formation process with different jurisdiction options.
This blog highlights a seamless process of setting up a business in Dubai in simplified steps for better understanding.
Comprehensive Guide to Setting Up a Business in Dubai
Here is a step-wise guide stating the process of business setup in Dubai in 2025:
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Step 1: Selection of Business Plan
The foremost step for any individual or group of individuals is to determine the business plan and selection of a business niche. Moreover, the Dubai Department of Economic Development (DED) and Free Zone authorities have classified business activity into different categories:
- Professional: This category includes business activities such as consultancy, marketing, IT, legal, etc.
- Industrial: This category involves business setup involving production, manufacturing, and other industrial work.
- Commercial: This category deals with businesses that trade retail, e-commerce, etc.
- Tourism & Hospitality: Under this category, the business activity deals with hotels, restaurants, travel agencies, air B&Bs, etc.
As the above-mentioned authorities are involved in regulating businesses by granting separate approvals, it is quintessential to choose your business category mindfully.
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Step 2: Selection of Appropriate Business Jurisdiction
There are three jurisdictional areas for business setup in Dubai and each serves different features:
- Free-Zone Business
Under such jurisdiction, owners can not obtain 100% of foreign ownership. This model is most suitable for businesses that ought to operate globally; however, involves minimal presence in the UAE market.
- Mainland Business
This business jurisdiction allows complete business operations across the UAE and the global market and requires approval from the Department of Economic Development (DED). Businesses who deal with local and global trade, service providers, etc fall under mainland business jurisdiction.
- Off-Shore Business
Businesses falling under this jurisdiction, require no office setup in Dubai and apply restrictions in carrying out operations within the UAE market.
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Step 3: Determining the Overall Business Structure
Once the business jurisdiction has been selected, it is important to determine the business structure to be followed. The business market in Dubai is constituted of the following structures:
- Sole Proprietorship – This type of business structure is owned and managed by a single person.
- Limited Liability Company or LLC – This business structure involves at least two parties or stakeholders.
- Foreign Company – Businesses choosing this structure will operate as a branch of a foreign company looking to establish its presence in Dubai.
- Free Zone Establishment (FZE) – This business structure is registered by a single person under the Free Zone business.
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Step 4: Initiate Trade Name Registration
Establishing your business with a unique trade name is a significant part of the business setup process in Dubai. Business owners must get the trade name registered with the Department of Economic Development (DED) in case of Mainland businesses or with the related authorities for Free-Zone businesses.
Moreover, the authorities specify that a trade name must:
- Be unique and not registered under the law
- Suggests what the business activity is all about
- Not include any offensive or religious terminology
- Contain appropriate legal structure denotations, like LLC, FZE, etc
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Step 5: Get Initial Approvals from Necessary Authorities
Depending on the nature of the business, owners must obtain initial approvals from the necessary authorities. For example;
- Mainland businesses must obtain approval from the Department of Economic Development.
- Free Zone businesses must get approval from the Free Zone authorities.
- For opening foreign company branches in Dubai, businesses must obtain approval from the Ministry of Economy.
- In addition, approvals can also be obtained from different government authorities in case of setting up healthcare or legal businesses in Dubai.
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Step 6: Prepare Necessary Legal Documents
Business owners must prepare the necessary business documents for registration. This generally includes a copy of the passport of the shareholders, a copy of the company Memorandum of Association (MoA), documents supporting the lease agreement for office space, etc.
In addition to this, additional documents may be requested for some businesses as specified by the governing body.
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Step 7: Determining the Location of Business
A registered office from where the day-to-day operations will take place is mandatory to determine for every business. Any business setup in Dubai can choose the following option:
- For Mainland businesses, it is mandatory to have a physical office location in Dubai.
- For Free-Zone businesses, owners can use co-working spaces, flexi-desk, etc.
- For Offshore businesses, it is not mandatory to have a physical office space in Dubai.
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Step 8: Apply for Business License
In Dubai, business licenses are of four types which are commercial, professional, industrial, and tourism. The Department of Economic Development (DED) issues business licenses to the businesses operating in Mainland whereas the Free-zone authorities issue licenses to the relevant businesses.
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Step 9: Open a Corporate Bank Account for Business Transaction
In order to carry out the day-to-day transactional operations, a business owner needs to open a corporate bank account in Dubai. Some of the renowned banks in Dubai are HSBC, Dubai Islamic Bank, Mashreq Bank, Emirates NBD, etc.
The general documents required to open a corporate bank account for businesses are:
- Copy of business license
- Documents related to shareholder/directors identities
- Supporting documents of business activities
- Copy of company MoA
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Step 10: Register Under the Applicable Taxation Policy
Under the Federal Tax Authority of Dubai, if the annual turnover of any business exceeds AED 375,000, the business must register under the Value Added Tax (VAT). In addition, businesses will be levied with a corporate tax if it’s earning more than AED 375,000 annually.
Thus, it is pivotal to adhere to the taxation system of Dubai in order to avoid any hefty penalties in the future.
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Step 11: Hire Employees and Commence the Business
If the business activity required to hire associates and executives for day-to-day operations, then business owners need to apply for an employment card. In addition, apply for work visas and adhere to labour contracts as per the Ministry of Human Resources and Emiratisation (MOHRE).
Thus, by complying with the UAE labour laws, the company is ready to officially set up to commence the business. During this stage, the success of the business operation largely depends on the marketing strategies implemented to establish a strong presence.
Conclusions
Though the process of business setup in Dubai involves adhering to different legal and statutory guidelines and labour laws, the lucrative and ever-growing market acts as a boon. However, to offer a seamless and hassle-free incorporation process, TaxMantra Global provides diverse and accurate legal and taxation advisory services to budding business owners and entrepreneurs in the UAE.
Thus, with the unmatchable assistance of over 40 years, we help to navigate the complexities of the legal and statutory market, realizing the dream of setting business ventures in Dubai a few steps closer.
Tags: Business Guidance, Business Guide, Business Plan for Dubai, Business Setup in Dubai, Dubai Business Guide, Dubai Business Setup, Setup The Business in Dubai